United Kingdom

Arm could return to London's stock market if Nvidia deal falls through

Arm could return to the stock market if its £29billion sale falls through, analysts have claimed.

Japanese owner Softbank is in the process of selling the British chip maker to US giant Nvidia, but the deal has been beset by regulatory hurdles.

There is also a mounting shortage of computer chips worldwide, with some analysts suggesting Softbank may find it easier – and more lucrative – to re-list Arm.

There is  a mounting shortage of computer chips worldwide, with some analysts now suggesting that Arm owner Softbank may find it easier to re-list on the London stock market

Nvidia insists that it always expected tough scrutiny from regulators and has factored this into its plans.

But a new security probe into the sale by UK authorities, calls in China for regulators to block it altogether and opposition from some of Arm’s customers have led some to conclude the deal is doomed.

Matthew Byatt, managing partner and semiconductor expert at Acuity Advisors, said Nvidia’s takeover was facing ‘severe headwinds that are getting stronger’.

But he said there is a strong case for Softbank to switch to an initial public offering (IPO) – or float – of Arm instead.

Byatt said: ‘What all the fuss about the Arm deal shows, really, is that the company’s value is in its independence.

‘So an IPO could now be the best outcome for shareholders, customers and the UK.’

Neil Campling, an analyst at Mirabaud Securities, said Softbank may even become the ‘real winner’ if it manages to get bigger returns through an IPO.

Arm was valued at £24billion when the Japanese firm bought it in 2016 and some analysts predicted its value had risen to as much as £40billion last year – significantly more than what Nvidia has offered.

On Monday the Government announced it was launching a review of the national security implications of the Nvidia deal, on top of an ongoing competition probe.

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